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The JSE looks set to contend with mixed Asian markets on Tuesday, with US corporate earnings, inflation, and debt problems in China’s property sector still the major themes on the market.

Strong third-quarter earnings have helped propel US markets to record highs, however, while Tesla rocketed 12% on Monday on news that rental group Hertz was planning to acquire 100,000 vehicles in a drive towards an electric fleet.

The $4.4bn (R65bn) sale added over a $100bn in market cap to Tesla as investors voted with their wallets over who will win the electric-vehicle race, said Oanda senior market analyst Jeffrey Halley in a note.

Even Facebook also rose, despite third-quarter revenue missing expectations slightly, and it seems a lot of bad news was priced into its stock, Halley said.

It is peak earnings week in the US, with Twitter, Alphabet and Microsoft due to report later. 

Inflation fears continue to build amid the backdrop of a strong third-quarter earnings season which is showing firms have some pricing power to pass on higher transitory inflation, said National Australia Bank analyst Tapas Strickland in a note. Firms are also noting they would be focusing on enhanced cost management, he said.

China property developer Modern Land become the fourth  property developer from that country to default on an overseas debt obligation on Monday, something which was weighing on sentiment in Asia, said Halley.

In morning trade, Japan’s Nikkei was up 1.83%, the Shanghai Composite was flat, while the Hang Seng had dipped 0.44%.

Tencent, of which the Naspers stable is the single-biggest shareholder, fell 0.69%.

Gold slipped 0.29% to $1,802.70/oz, while platinum lost 0.88% to $1,049. Brent crude was 0.19% weaker at $86.10 a barrel.

The rand was little changed at R14.69/$.

The local corporate calendar is light on Tuesday, with Western Cape-focused Spear Reit due to report its results for the six months to end-August, though it has not released a trading update, indicating no major earnings swing.

The Reserve Bank’s leading business cycles indicator for August is due for release and will show a projection of SA’s economic growth cycle for the next six to 12 months.

The indicator is based on a range of components, including the number of approved building plans, job advertisement space, the Bureau for Economic Research (BER) business confidence index, manufacturing order volumes and passenger vehicles sold.

The indicator dipped 2.5% month on month in July. Nine of the 10 components registered a decrease, with the exception of residential buildings. The number of vehicles sold and manufacturing production took a hit from civil unrest in that month.



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